One question we often receive is this: If my solar panels are not working, am I allowed to stop making loan payments?
Potential Impact of Non-Payment
Theoretically, the answer is no.
You are contractually obligated to continue making payments to your lender according to the terms of your financing agreement. If you miss those payments, the lender may report the delinquency to credit bureaus. When this happens, it can negatively affect your credit score.
However, if you have hired Prevost Law Firm to help remove the solar loan from your credit report or to pursue a legal resolution, there is a path forward.
While we work to resolve your case, we understand that it may feel unreasonable to continue paying for a system that is not functioning.
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In fact, this very situation is what the Federal Trade Commission’s Holder Rule was designed to address.
Understanding the FTC’s Holder Rule
The Holder Rule protects consumers by allowing them to assert the seller’s misconduct as a defense against the lender. In simple terms, it links the seller’s duty to deliver a working product or service with your obligation to pay for it. If the seller fails to meet their obligations—such as delivering a functioning solar energy system—you may have legal grounds to stop payments.
That said, if you choose to withhold payment, your credit will likely take a hit until you resolve the matter legally. It is a personal decision for you to make. Some clients may feel justified in refusing to continue paying for a product that is not delivering any value.
What Are the Risks?
While lenders sometimes threaten repossession of the solar panels, we have not seen this happen to any of our clients. In rare instances, a lender may attempt to deactivate the system. However, if the panels are not producing energy in the first place, this action has little practical impact.
Whether or not you continue making payments does not significantly affect the strength of your legal case. It is largely a personal or financial decision. If you are unable to cover both your traditional electric bill and the solar loan payment, we recommend prioritizing your electricity bill. We will address the solar loan payment through legal channels.
Conclusion
Stopping payment on a non-functioning solar panel system can affect your credit, but it does not weaken your legal position. While the decision is ultimately yours, we are here to support you either way. If you are facing this issue and unsure of what steps to take, contact Prevost Law Firm for a no-cost claim review.
We are committed to helping you protect your rights and pursue the resolution you deserve.
